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Majority of Americans are Behind on their Retirement Savings, Study Finds

Investment Weekly News

By a News Reporter-Staff News Editor at Investment Weekly News -- - HYPERLINK "http://www.investopedia.com/" nInvestopedia, the premier online source of trusted financial content, released a study revealing key insights into affluent Americans' preparedness for retirement. The survey of 700 employed investors shows that saving for retirement is a significant challenge, with 52 percent of respondents feeling behind on their target savings and many expressing concerns that they will be unable to retire on time, according to their individual goals.

The Investopedia study also reveals a direct correlation between a respondent's level of financial knowledge and their confidence in their retirement savings plan. Fifty-eight percent of self-identifying novice investors feel they are currently behind on their savings, while expert investors are seven times more likely to be ahead of their goals.

"That more than half of Americans with above-average savings feel that they have inadequate retirement savings is a nationwide problem that needs to be addressed. These concerns coming from investors will only be magnified when looking at the general population," comments David Siegel, CEO of Investopedia. "Retirement is repeatedly cited as the top financial concern for Americans and yet it's clear they're still not receiving the necessary tools and advice to succeed. The first step to alleviating this burden and getting people on track is education. Financial literacy is not just an individual issue but one that impacts a country's economy, and we urge schools, communities and government organizations to make it a top priority."

The study, Retirement in America: The Search for Security, revealed other key insights about investors in the United States over the age of 18 who have input into their household investment decisions. Respondents who self-identified as being behind, on track and ahead all use employee-sponsored retirement plans at the same rate. Additionally, 78 percent of those who feel they are behind currently contribute to an employee-sponsored plan, indicating that saving through a 401(k) or 403(b) is not enough to stay on track.

Nearly four out of five investors participate in some form of retirement plan though only 18 percent receive professional advice. Only 10 percent of those surveyed feel they are ahead in their retirement savings. Contributing to an individual retirement account (IRA) is the biggest differentiating factor for those who feel ahead of schedule. Eighty-two percent of ahead-of-schedule respondents indicated contributing to an IRA. Twenty-eight percent of respondents agreed that they were on track. The remaining 10 percent of respondents stated they were unsure about the status of their retirement savings.

The level of income for respondents does not appear to be a driving force behind retirement savings. Investors who say they are ahead have more than five times the investable assets of those who feel behind while earning less than two times the average income.

Keywords for this news article include: Investopedia, Finance and Investment.

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